North Sea work surges on high prices

07 March 2013

The main North Sea countries are seeing strong exploration and development activity, driven by high oil and gas prices and improved investment terms, Martin Quinlan writes

THE North Sea is a busy oil and gas province. For two years,
oil and gas prices have been high and relatively stable, while
explorers have had their interest sharpened by licensing offers
in the UK and Norway. In the UK, investment confidence has been
lifted by last year’s tax incentives; in Norway,
recent large discoveries are the attraction.

But – as seen in the past – high activity
levels can soon strain the North Sea area’s
capacities in construction and oil services. In the UK, the
producers’ and suppliers’
organisation, Oil & Gas UK (OGUK), says there are concerns
about "shortages of skilled personnel, wage inflation and a
general escalation of operation costs". In Norway, the
Norwegian Petroleum Directorate (NPD) says there are "capacity
challenges" for operators and suppliers, with availability of
drilling rigs and flotels being particular bottlenecks. The
clearest evidence of an upturn in...

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